^^^t:^-^^^ :rM/
APR 7 1988
^w ubrary
NORTH CAROLINA
REGISTER
IN THIS ISSUE
CONi
EXECUTIVE ORDERS
FINAL DECISION LETTERS
PROPOSED RULES
Housing Finance Agency
Human Resources
NRCD
State Treasurer
^/STRN^L
ISSUE DATE: APRIL 4, 1988
Volume 3 • Issue 1 • Pages 1-25
INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE
NORTH CAROLINA REGISTER
The North Carolina Register is published monthly and
contains information relating to agency, executive,
legislative and judicial actions required by or affecting
Chapter 150B of the General Statutes. All proposed, ad-
ministrative ailes and amendments filed under Chapter
150B must be published in the Register. The Register
will typically comprise approximately one hundred
pages per issue of legal text.
State law requires that a copy of each issue be pro-
vided free of charge to each county in the state and to
various state officials and institutions. The North
CaroUna Register is available by yearly subscription at
a cost of ninety-five dollars ($95.00) for 12 issues.
Requests for subscriptions to the North Carolina
Register should be directed to the Office of Ad-
ministrative Hearings, P. 0. Drawer 1 1666, Raleigh, N.
C. 27604, Attn: Subscriptions.
ADOPTION. AMENDMENT, AND REPEAL OF
RULES
An agency intending to adopt, amend, or repeal a rule
must first publish notice of the proposed action in the
North Carolina Register. The notice must include the
time and place of the public hearing; a statement of how
public comments may be submitted to the agency either
at the hearing or otherwise; the text of the proposed
rule or amendment; a reference to the Statutory
Authority for the action and the proposed effective date.
The Director of the Office of Administrative Hearings
has authority to publish a summary, rather than the
full text, of any amendment which is considered to be
too lengthy. In such case, the full text of the rule con-
taining the proposed amendment will be available for
public inspection at the Rules Division of the Office of
Administrative Hearings and at the office of the pro-
mulgating agency.
Unless a specific statute provides otherwise, at least
30 days must elapse following publication of the pro-
posal in the North Carolina Register before the agency
may conduct the required public hearing and take ac-
tion on the proposed adoption, amendment or repeal.
When final action is taken, the promulgating agency
must file any adopted or amended rule for approval by
the Administrative Rules Review Commission. Upran ap-
proval of ARRC, the adopted or amended rule must be
filed with the Office of Administrative Hearings. If it
differs substantially from the proposed form published
as part of the public notice, upon request by the agen-
cy, the adopted version will again be published in the
North Carolina Register.
A rule, or amended rule cannot become effective
earlier than the first day of the second calendar month
after the adoption is filed with the Office of Ad-
ministrative Hearings for publication in the NCAC.
Proposed action on rules may be withdrawn by the
promulgating agency at any time before final action is
taken by the agency.
TEMPORARY RULES
Under certain conditions of an emergency nature,
some agencies may issue temp>orar>' rules. A temporary
rule becomes effective when adopted and remains in
effect for the period specified in the rule or 180 days,
whichever is less. An agency adopting a temporary rule
must begin normal rule-making procedures on the per-
manent rule at the same time the temporary rule is
adopted.
NORTH CAROLINA ADMINISTRATIVE CODE
The North Carolina Administrative Code (NCAC) is
a compilation and index of the administrative rules of
25 state agencies and 38 occupational licensing boards.
The NCAC comprises approximately 15,000 letter size,
single spaced pages of material of which approximate-
ly 35% is changed annually. Compilation and publica-
tion of the NCAC is mandated by G.S. 150B-63(b).
The Code is divided into Titles and Chapters. Each
state agency is assigned a separate title which is fur-
ther broken down by chapters. Title 21 is designated
for occupational licensing boards.
The NCAC is available in two formats.
(1) Single pages may be obtained at a minimum
cost of two dollars and 50 cents ($2.50) for 10
pages or less, plus fifteen cents ($0.15) per each
additional page.
(2) The full publication consists of 52 volumes,
totaling in excess of 15,000 pages. It is sup-
plemented monthly with replacement pages. A
one year subscription to the full publication in-
cluding supplements can be purchased for
seven hundred and fifty dollars ($750.00). In-
dividual volumes may also be purchased with
supplement service. Renewal subscriptions for
supplements to the initial publication available.
Requests for pages of rules or volumes of the NCAC
should be directed to the Office of Administrative
Hearings.
NOTE
The foregoing is a generalized statement of the pro-
cedures to be followed. For specific statutory language,
it is suggested that Articles 2 and 5 of Chapter 150B of
the General Statutes be examined carefully.
CITATION TO THE NORTH CAROLINA
REGISTER
The North Carolina Register is cited by volume, issue,
page number and date. 1:1 NCR 101-201, April 1, 1986
refers to Volume 1, Issue 1, pages 101 through 201 of
the North Carolina Register issued on April 1, 1986.
North Carolina Register. Published monthly by
the Office of Administrative Hearings, P.O.
Drawer 1 1666, Raleigh, North Carolina 27604, pur-
suant to Chapter I50B of the General Statutes.
Subscriptions ninety-five dollars ($95.00) per year.
North Carohna Administrative Code. Published
in looseleaf notebooks with supplement service by
the Office of Administrative Hearings, P.O.
Drawer 1 1666, Raleigh, North Carolina 27604, pur-
suant to Chapter 150B of the General Satutes.
Subscriptions seven hundred and fifty dollars
($750.00). Individual volumes available.
NORTH
CAROLINA
REGISTER
n
ISSUE CONTENTS
I. EXECUTIVE ORDERS
Executive Order 68-71 1
II. FINAL DECISION LETTERS
Voting Rights Act 5
Office of Administrative Hearings
P. O. Drawer 11666
Raleigh, NC 27604
(919) 733 - 2678
Robert A. Melott,
Director
James R. Scarcella, Sr.
Deputy Director
Molly Mason,
Assistant Director
Staff:
Ruby Creech,
Publications Coordinator
Teresa Johnson,
Editorial Assistant
Jean Shirley,
Editorial Assistant
Latarsha Roberts,
Records Clerk
III. PROPOSED RULES
Human Resources
Health Services 7
Mental Assistance 7
Independent Agencies
North Carolina Housing
Finance Agency 21
NRCD
Coastal Management 11
State Treasurer
Local Government
Commission 18
rv. CUMULATIVE INDEX 25
NORTH CAROLINA REGISTER
Publication Deadlines and Schedules
(March 1988 - March 1989)
Issue
Last Day
Last Day
Earliest
♦
Date
for
for
Date for
Earliest
Filing
Electronic
PubUc
Effective
Filing
Hearing &
Adoption by
Agency
Date
^l,i^if1,tJHf
+++++++♦
ifit^-^*^*^
+♦♦♦♦♦♦+
^if^^^^iH
03; 15, 88
02/24 88
03/02/88
04/14/88
07,/01/88
04,04/88
03/11/88
03/18/88
05/04/88
08/01/88
04/15/88
03/25/88
04/01/88
05/15/88
08/01/88
05:02/88
04/11/88
04/18/88
06/01/88
09/01/88
05 16/88
04/27 88
05/03/88
06/15/88
09/01/88
06,01/88
05/10/88
05/17/88
07/01/88
10/01/88
06/15/88
05/26 88
06/02/88
07/15/88
10/01/88
07/01/88
06/10/88
06/17/88
07/31/88
11/01/88
07/15/88
06/24 88
07/01/88
08/14/88
11/01/88
08/01,88
07/11/88
07/18/88
08/31/88
12/01/88
08 15,88
07/26 88
08/02/88
09/14/88
12/01/88
09/01/88
08/11 88
08/18/88
10/01/88
01/01/89
09/15/88
08/26/88
09/02/88
10/15/88
01/01/89
10,03/88
09/12/88
09/19/88
11/02/88
02/01/89
10/14/88
09/26 88
10/03/88
11/13/88
02/01/89
11/01/88
10/11,88
10/18/88
12/01/88
03/01/89
11/15/88
10/26/88
11/02/88
12/15/88
03/01/89
12,01/88
11/07,88
11/15/88
12/31/88
04/01/89
12/15/88
11/23/88
12/02/88
01/14/89
04/01/89
01/02/89
12/08/88
12/15/88
02/01/89
05/01/89
01/16/89
12/27,88
01/03/89
02/15/89
05/01/89
0201/89
01/1089
01/17/89
03/03/89
06/01/89
02/ 15/89
01/26/89
02/02/89
03/17/89
06/01/89
03/01/89
02/08/89
02/15/89
03/31/89
07/01/89
03/15/89
02/21/89
03 02 '89
04/14/89
07/01/89
* The "Earliest Effective Date" is computed assuming that the public hearing
and adoption occur in the calendar month immediately following the "Issue
Date" , that the agency files the rule with The Administrative Rules Review
Commission by the 20th of the same calendar month and that ARRC approves
the rule at the next calendar month meeting.
EXECUTIVE ORDERS
EXECUTIVE ORDER NUMBER 68
NORTH CAROLINA COMMISSION ON THE
SLPERCONDLICTING SUPER COLLIDER
North Carolina's proposal to be the site of the
Superconducting Super Collider (SSC) presents
an enormous opportunity for the state to solidify
its position as a world center of high technology
research and development. If North Carolina is
chosen as the site of the SSC, the benefits to the
state and its people will be substantial. At the
same time, any project of this magnitude wiU
have effects on individuals and the surrounding
communities. It is the obligation of the state to
ensure that the effects of the SSC project— on the
people in the area, on the counties and munici-
palities, and on the environment--are beneficial.
The SSC is a unique public project in many re-
spects. It is the largest scientific instrument in
the world and is designed for pure research. If
North Carolina is chosen as the SSC site, the
state will acquire the land needed for the SSC,
then release the land to the federal government.
This plan necessarily will involve the local gov-
ernments in the SSC area. Because of the com-
plexity of the project and the levels of
government involved, an ongoing mechanism is
needed to ensure that those who implement the
SSC project are sensitive to the many govern-
mental and individual rights and prerogatives in-
volved.
Therefore, by the authority vested in me as
Governor by the Constitution and laws of North
Carolina, IT IS ORDERED:
Section 1. ESTABLISHMENT
The North Carolina Commission on the
Superconducting Super Collider is hereby estab-
lished. The Commission shall consist of not
more than fifteen members appointed by the
Governor to serve at the pleasure of the Gover-
nor. All vacancies shall be filled by the Gover-
nor. The SSC Project Director shall serve as the
Chairperson. The SSC Project Director shall
vote only when necessary to break a tie.
Section 3. FUNCTIONS
The North Carolina Commission on the
Superconducting Super Collider shall have the
following duties:
1. To serve as a coordinating mechanism be-
tween the three counties involved and the state
in matters relating to the SSC project.
2. To recommend locations to the state and
federal governments for the SSC Project which
wUJ displace the fewest property owners.
3. To recommend to the state the location of
roads and utilities necessary for the project.
4. To present the interests of the property
owners potentially affected by the SSC Project
to ensure that each receives fair compensation for
SSC property acquisitions.
5. To study the effects of SSC-related develop-
ment on local government entities and recom-
mend amounts of state fmancial aid to lessen the
impact of the SSC and insure that local govern-
ments are able to meet the needs of their com-
munities.
6. To monitor environmental impacts of the
SSC and to recommend measures as necessary to
prevent adverse effects on the environment.
7. To promote and stimulate cooperative
planning among the local governments affected
to accommodate SSC-related growth for the
benefit of all citizens.
8. To meet as necessary, at the call of the
Chairperson or of the Governor.
Section 4. ADMINISTRATION
1. Financial support for the Commission may
be provided out of funds available to the North
Carolina Board of Science and Technology in
response to the requests of the Chairperson. All
expenditures must be approved beforehand by
the Chairperson.
2. Subject to the availability of funds, members
of the Commission may be reimbursed for travel
and subsistence expenses as authorized by NCGS
Section 138-5.
3. The SSC Project shall provide the staff and
administrative support for the Commission.
Section 2. MEMBERSHIP
The membership of the Commission shall in-
clude but not be limited to representatives from
the following groups:
1. The Durham County Manager.
2. The Granville County Manager.
3. The Person County Manager.
4. Two Durham County Commissioners.
5. Two GranviUe County Commissioners.
6. Two Person County Commissioners.
7. The SSC Project Director.
Section 5. REPORTS
1. The Commission shall present interim re-
ports and recommendations to the Governor at
least aimually.
2. The Commission shall present a Final Re-
port and Recommendations to the Governor
before its dissolution.
Section 6. IMPLEMENTATION AND
DURATION
1. This order shall be effective immediately.
NORTH CAROLINA REGISTER
EXECUTIVE ORDERS
2. This Commission shall dissolve at the plea-
sure of the Governor.
Done in Raleigh, North Carolina, this 1 1th day
of March, 1988.
EXECLTrV E ORDER NUMBER 69
GOVERNOR'S TASK FORCE ON
AQUACULTLRE IN NORTH CAROLINA
By authority vested in me as Governor by the
Constitution and laws of North Carolina, IT IS
ORDERED:
Section L
There is hereby estabhshed the Governor's Task
Force on Aquaculture in North Carolina. The
Task Force shall consist of a Policy Committee
and such technical committees as the Pohcy
Committee shall create.
Section Z
The Policy Committee shall consist of not more
than fifteen (15) members. Members of the
PoUcy Committee shall include:
a. Agriculture Advisor to the Governor;
b. President of the UNC System;
c. President of Duke University;
d. Secretary of Natural Resources and Com-
munity Development;
e. Commissioner of Agriculture;
f Secretar>- of Administration;
g. Secretary- of Commerce;
h. Science Advisor to the Governor;
i. President of the North CaroUna Farm Bu-
reau;
j. President of the North Carolina Biotech-
nology' Center;
k. A member recommended by the Lieutenant
Governor;
1. A member recommended by the Speaker
of the House;
m. Up to four (4) members at large appointed
by the Governor.
The Secretary of Administration shall serve as
Chairman of the Task Force. All members
named under subsections (k), (1), (m) above shall
serve at the pleasure of the Governor and the
Governor shall fill all vacancies. If a vacancy
occurs in a seat held by a member recommended
by the Lieutenant Governor or Speaker of the
House, the Governor shall fill the vacancy after
recommendation by the appropriate official.
Section 3.
The Policy Committee may form such technical
committees as necessary to study and report on
the various aspects of aquaculture in this State.
The members of the technical committees shall
be drawn from professional and technical experts
in the various related fields. Members of the
Technical Committees shall be asked to serve by
the Policy Committee and shall serve at its plea-
sure.
Section 4
The Task Force shall have the following re-
sponsibilities:
a. Analyze environmental, fmancial, market-
ing, processing, educational and legal is-
sues within the aquaculture industry.
b. Formulate recommendations for changes
in current North Carolina statutes con-
cerning the aquaculture industry.
c. Formulate recommendations for agency
and university programs to promote and
develop the aquaculture industry.
d. Formulate recommendations for research
programs, demonstration projects, and
other technology transfer activities.
e. Perform other relevant studies and services
as recommended by the Policy Commit-
tee,
f Prepare a final report to the Governor re-
commending an aquaculture pohcy for
North Carolina. This report shall be
submitted to the Governor no later than
January- 1, 1989.
Section 5^
The Department of Agriculture and the De-
partment of Administration shall provide neces-
sary staffmg and administrative support for the
Task Force, as directed by the PoUcy Committee.
Section 6^
This Order shall become etTective immediately
and shall remain in effect for one year.
Done in Raleigh, North Carolina, this 1 1th day
of March, 1988.
EXECUTTV E ORDER NUMBER 70
WOMEN S ECONOMIC DEVELOPMENT
ADVISORY COUNCIL
By authority vested in me as Governor by the
Constitution and laws of North Carolina it is
ORDERED:
Section L I hereby recreate and estabhsh in the
Department of Commerce the North Carolina
NORTH CAROLINA REGISTER
EXECUTIVE ORDERS
Women's Economic Development Advisory
Council. This Council will be composed of at
least twelve (12) members who have distin-
guished themselves by their accomplishments in
the private sector. The membership of this
Council will, to the extent practical, contain rep-
resentatives from all major geographic areas of
the State. The members of this Council will be
appointed by the Governor and will serve at the
pleasure of the Governor. Those members ap-
pointed to the Women's Economic Development
Advisory Council by the Governor under Exec-
utive Order Number 7 retain their membership
and continue to serve at the pleasure of the
Governor.
Section Z The Governor shall designate a
Chairman from the membership of the Council.
The Council will meet at the call of the Chair or
the Secretary of the Department of Commerce.
The current Chair shall continue to serve as
Chair unless directed otherwise by the Governor.
Section 3^ The Women's Economic Develop-
ment Advisory Council will have the duty to
thoroughly explore opportunities for women in
our economy; carefully evaluate those opportu-
nities; and advise the Secretary of Commerce on
strategic courses of action, consistent with the
State's economic development philosophy, which
will best promote and encourage equal opportu-
nity and advancement and integration of women
into all aspects of North Carolina's economy.
The primary focus of the Council shall be in the
area of business opportunities, so as not to be
duplicative of complementary efforts to enhance
the status of women in the North Carolina
economy.
Section 4^ The Department of Commerce shall
provide the administrative support for this
Council.
Section 5^ The members of the Women's Eco-
nomic Development Advisory Council shall be
entitled to reimbursement for subsistence and
travel expenses authorized for State Boards and
Commissions as provided in N.C.G.S. 138-5.
Funds are to be made available as authorized by
the Department of Commerce.
Section 6^ This order supersedes and replaces
Executive Order 7 signed on June 28, 1985.
Section 7. This Executive Order is effective
immediately and shall remain in effect until May
15, 1989, or unless terminated earlier or extended
by further Executive Order.
Done in the Capitol City of Raleigh, North
Carolina, this the 1 1th day of March, 1988.
EXECUTIVE ORDER NUMBER 71
GOVERNOR'S TASK FORCE ON RAIL
PASSENGER SERVICE
North Carolina and the nation were built on
and along railroads. In particular, our urban Pi-
edmont has been shap)ed in large part by the
General Assembly's investment in the North
Carolina Railroad over 130 years ago. Many of
those Piedmont cities are now leading North
Carolina's dramatic population and economic
growth.
With that growth comes an ever-increasing need
for intercity, regional, and urban transportation.
Some of our intercity traffic today moves via
Amtrak along existing railroad routes through
North Carolina. In the future, even greater reli-
ance may need to be placed on rail passenger
opportunities.
Today, Amtrak is considering changing its in-
tercity routes serving North Carolina. At the
same time, the private freight railroads continue
to react to economic forces by abandoning ser-
vice and routes. These decisions, made outside
North Carolina, not only affect today's trans-
portation pattems, but could well limit our
transportation choices for the future. Passenger
trains move on some of these routes today, and
may weU need to move on others in the future.
Possibly, other forms of passenger transportation
could also use those corridors.
As the North Carolina Railroad and the Atlan-
tic and North Carolina Railroad prepare to re-
negotiate their right-of-way leases between
Charlotte, Greensboro, Raleigh and Morehead
City, consideration should be given to preserva-
tion of future options for inter-urban transit by
a carrier able to offer affordable, rehable rail pas-
senger service.
This corridor, as well as other rail corridors in
and across the state, may well hold opportunities
for North Carolina's future mobility. Every ef-
fort should be given to exploration of short-term
as well as longer-term opportunities for raU pas-
senger service along these corridors in North Ca-
rolina.
Therefore, by the authority vested in me as
Governor by the Constitution and laws of North
Carolina, IT IS ORDERED:
Section 1. ESTABLISHMENT
The Governor's Task Force on Rail Passenger
Service is hereby established. The Task Force
NORTH CAROLINA REGISTER
EXECUTIVE ORDERS
shall consist of at least ten and not more than
fifteen members appointed by the Governor to
serve at the pleasure of the Governor. All va-
cancies shall be filled by the Governor. The
Governor shall designate one of its members as
Chairman and one as Vice- Chairman. The Sec-
retary of Transportation or his designee shall
serve as an ex-officio member and shall net be
included in the fifteen members to be appointed
by the Governor.
Section 2. FUNCTIONS
( 1 ) The Task Force shall meet regularly at the
call of the Chairman or the Governor. The Task
Force is authorized to conduct public hearings
for the purpose of receiving the comments and
suggestions of citizens throughout the State.
(2) The duties of the Task Force shall be to
conduct a study of the present, near term, and
future needs for rail transit service connecting
major cities of North Carolina, with emphasis
on the potential for providing affordable service.
Section 3. ADMINISTRATION
(a) The Director of Public Transportation of
the Department of Transportation shall provide
staff support to the Task Force. The Secretary
of Transportation may designate such other per-
sonnel from his staff as he deems appropriate and
necessary to furnish guidance and assistance to
the Task Force.
(b) The Department of Transportation is au-
thorized, subject to the availability of funds, to
retain consulting ser\'ice(s) or employ other
professional(s) if it determines that such
service(s) or professional(s) would offer a cost-
efficient method of gathering and analyzing in-
formation. Funds for the retention and payment
of such service(s) or professional(s) shall be made
available from funds authorized for the Division
of Public Transportation.
(c) Members of the Task Force may be reim-
bursed for necessary travel and subsistence ex-
penses as authorized by N.C.G.S. 138-5. Funds
for reimbursement for such expenses shall be
made available from funds authorized for the
Division of Public Transportation.
(d) Funds for the support of the Task Force
study, in addition to expenses authorized in Sec-
tion 3, subsections (b) and (c) above, shall be
made available from funds authorized for the
Division of Public Transportation.
Section 4. REPORTS
The Task Force shall present a report to the
Governor not later than the 1 5th day of January,
1989.
Section 5. IMPLEMENTATION AND
DURATION
(1) This order shall be effective immediately.
(2) The Commission shall dissolve at the plea-
sure of the Governor, but no later than Decem-
ber 30, 1989.
Done at Raleigh, North Carolina this 1 1th day
of March, 1988.
NORTH CAROLINA REGISTER
VOTING RIGHTS ACT FINAL DECISION LETTERS
[G.S. I20-30.9H, effective July 16, 1986, requires that all letters and other documents issued by the
Attorney General of the United States in which a final decision is made concerning a "change af-
fecting voting" under Section 5 of the Voting Rights Act of J 965 be published in the North Carolina
Register. /
U.S. Department of Justice
Civil Rights Division
WBR:MAP:KIF:gmh
DJ 166-012-3 Voting Section
T1281 P.O. Box 66128
T3854-3858 Washington, D.C. 20035-6128
March 4, 1988
David A. Holec, Esq.
City Attorney
P.O. Box 1388
Lumberton, North Carolina 28358
Dear Mr. Holec:
This refers to the December 7, 1987, annexations to the City of Lumberton in Robeson County,
North Carolina, submitted to the Attorney General pursuant to Section 5 of the Voting Rights Act of
1965, as amended, 42 U.S.C. 1973c. We received your submission on January 4, 1988.
The Attorney General does not interpose any objections to the changes in question. However,
we feel a responsibility to point out that Section 5 of the Voting Rights Act expressly provides that the
failure of the Attorney General to object does not bar any subsequent judicial action to enjoin the en-
forcement of such changes. See the Procedures for the Administration of Section 5 (28 C.F.R. 51.41).
Sincerely,
Wm. Bradford Reynolds
Assistant Attorney General
Civil Rights Division
By:
Gerald W. Jones
Chief, Voting Section
NORTH CAROLINA REGISTER
VOTING RIGHTS ACT FINAL DECISION LETTERS
U.S. Department of Justice
Civil Rights Division
WBR:SSC:TGL:gmh
DJ 166-012-3 Voting Section
T1769-1774 P.O. Box 66128
Washington, D.C. 20035-6128
Dewitt F. McCarley, Esq.
City Attorney
P.O. Box 7207
Greenville, North Carolina 27835-7207
Dear Mr. McCarley:
This refers to the six annexations [Ordinance Nos. 1766, 1779, 1780, 1794, 1795, and 1797 (1987))
to the City of Greenville in Pitt County, North Carolina, submitted to the Attorney General pursuant
to Section 5 of the Voting Rights Act of 1965, as amended, 42 U.S.C. 1973c. We received your sub-
mission on Januar>' 15, 1988.
The Attorney General does not interpose any objections to the changes in question. However,
we feel a responsibility to point out that Section 5 of the Voting Rights Act expressly provides that the
failure of the Attorney General to object does not bar any subsequent judicial action to enjoin the en-
forcement of such changes. See the Procedures for the Administration of Section 5 (28 C.F.R. 51.41).
Sincerely,
Wm. Bradford Reynolds
Assistant Attorney General
Civil Rights Division
By;
Gerald W. Jones
Chief Voting Section
NORTH CAROLINA REGISTER
PROPOSED RULES
TITLE 10 - DEPARTMENT OF HUMAN
RESOURCES
l\ otice is hereby given in accordance with G.S.
I SOB- 1 2 that the Division of Health Services in-
tends to amend regulations cited as 10 NCAC 9D
.0302, .0303 and .03 2S.
1 he proposed effective date of this action is A u-
gust 1, 1988.
1 he public hearing will be conducted at 1:30
p.m. on May 9, 1988 at Norton Board Room, 6th
Floor, Cooper Memorial Health Building, 225
North McDowell Street, Raleigh, North Carolina.
Co
omment Procedures: Any person may request
information or copies of the proposed rules by
writing or calling John P. Barkley, Agency Legal
Specialist, Division of Health Services, P.O. Box
2091, Raleigh, North Carolina 27602-2091, (919)
733-3134. Written comments on these subjects
may be sent to Mr. Barkley at the above address.
Written and oral (for no more than ten minutes)
comments on these subjects may be presented at
the hearing. Notice should be given to Mr. Bark-
ley at least three days prior to the hearing if you
desire to speak.
CHAPTER 9 - HEALTH: LABORATORY
SUBCHAPTER 9D - CERTIFICATION AND
IMPROVEMENT
SECTION .0300 - LABORATORY
CERTIFICATION
.0302 NOTICE AND PROCEDURE
(a) A laboratory seeking certification must re-
quest in writing an application for certification
from the Department of Human Resources, Di-
vision of Health Services, Laboratory Section,
306 North Wilmington Street, Raleigh, North
Carolina, 2761 1. The application for certification
shall include:
(6) Payment of the certification fee as specified
in Rule .0303.
Statutory Authority G.S. J30A-3/5; I30A-326.
.0303 CERTIFICATION: CERTIFICATION
RENEWAL: AND FEES
(b) A laboratory shall renew its certification
e\'er>' tw» yoaro. year by payment of the certif-
ication fee by December j^ If the fee has not
been paid by December 31 of each year, the lab-
oratorv's certification will not be renewed, and
the laboratory must apply for recertification pur-
suant to Rule .0328. Notwithstanding the above,
the first certification renewal fee after the effective
date of these Rules shall be due on February J^
1988 and must be paid on or before March V^
1988 or the laboratory's certification will not be
renewed. ¥be ronowal sbatt be Every two years,
the laboratory shall renew its certification based
upon an on-site evaluation by a laboratory cer-
tification evaluator and compliance with the mi-
nimum requirements of this Section.
(d) The certification fee shaU be twenty dollars
($20.00) per analyte. The minimum and maxi-
mum fee per analyte group shall be as set out in
G.S. 130A-326(7). The analyte groups are as
follows:
Inorganic Chemistry
Organic Chemistry I (Synthetic
Organic Chemicals)
Organic Chemistry II (Volatile
Organic Chemicals)
Total Coliforms
Radio Chemistry
The certification fee shall not be prorated nor
refunded.
Statutory Authority G.S. I30A-3I5; I30A-326.
.0328 RECERTIFICATION
(a) A laboratory is eligible for recertification six
months after revocation or nonrenewal of its
certificate, except in the following instances:
(3) A laboratory for which certification was
not renewed for failure to pay the certif-
ication fee by the date required in Rule
.0303 is eligible for recertification after
paying the overdue certification fee; a la-
boratory applying for recertification on
this basis shall not be required to pay an
additional certification fee with the appli-
cation.
Statutory Authority G.S. 130A-3I5: I30A-326.
******************
ly otice is hereby given in accordance with G.S.
I SOB- 1 2 that the Department of Human
Resources/ Division of Medical Assistance intends
to amend regulations cited as 10 NCAC 26G
.0402; 26H .0102 - .0/04, .0107, .0401.
1 he proposed effective date of this action is A u-
gust 1, 1988.
1 he public hearing will be conducted at 1:30
p.m. on May 16, 1988 at North Carolina Division
NORTH CAROLINA REGISTER
PROPOSED RULES
of Medical Assistance, 1985 U instead Drive,
Room 201, Raleigh, N.C. 27603.
y^ommcnt Procedures: Written comments con-
cerning these amendments must be submitted by
May 16, I9SS to: Director, Division of Medical
Assistance, 1985 Umstead Drive, Raleigh. N.C.
27603. Oral comments may be presented at the
hearing. In addition, a fiscal impact statement
on these proposed rules is available upon written
request from the same address.
CHAPTER 26 - MEDICAL SERVICES
SUBCHAPTER 26G - PROGRAM INTEGRITY
SECTION .0400 - AGENCY RECONSIDERATION
REVIEW
.0402 RECONSIDERATION REVIEW FOR
PROGRAM ABUSE
(f) Th# provid e r wiii h% inotruct e d tbat- Ae fe-
quoot fo* aft li ' Xooutive Dt ' oision ©f h e aring must
be rt'coived within the timo set hy- Rule .0 ' 103(b)
a« Fxocutii i O Docirion ha* ftet- boon roo e iv e d, the
admini j. truti' iB moaouroo ohall be i^ nplomontod
without furthor notification.
Authority G.S. 108A-25(b): 42 C.F.R. Part 455.
SUBCHAPTER 26H - REIMBURSEMENT PLANS
SECTION .0100 - REIMBURSEMENT FOR
SKILLED
NURSING FACILITY AND INTERMEDIATE
CARE FACILITY SERVICES
.0102 RATE SETTING METHODS
(b) The prospective rate consists of two com-
ponents: a direct patient care rate and an indirect
rate computed and applied as follows:
(1) The direct rate is based on the Medicaid
cost per day incurred in the following cost
centers:
(A) Nursing,
(B) Dietary or Food Service,
(C) Laundry and Linen
(D) Housekeeping,
(€4 Modical Ptooordo,
fp) [B) Patient Activities,
{G) (Fj Social Services,
^:^^ Ltilii'.ation RL" i iovv,
fi} (G) Ancillary Services (includes several
cost centers).
Authority G.S. I08A-25(b); I08A-54; I08A-55;
S.L. 1985, c. 479, s. 86; 42 C.F.R. 447 Subpart
C.
.0103 REASONABLE AND NON-ALLOWABLE
COSTS
(a) Providers have an affiimative responsibility
to operate economically and efficiently so that
their costs are reasonable. Providers are required
to provide services at the lowest possible costs in
compliance with Federal and State laws, regu-
lations for licensing and certification, and stand-
ards for quality of care and patients' safety.
Providers are also responsible for the fmancial
actions of their agents (e.g., management com-
panies) in this regard.
(b) The state may publish guidelines to defme
reasonable costs in certain areas after careful
study of industry-wide cost conditions.
(c) The following costs are considered non-al-
lowable facility costs because they are not related
to patient care or are specifically disallowed un-
der the North Carolina State Plan:
(1) bad debts;
(2) advertising— except personnel want ads,
and one line yellow page (indicating facil-
ity address);
(3) life insurance (except for employee group
plans);
(4) interest paid to a related party;
(5) contributions, including political or
church-related, charity and courtesy al-
lowances;
(6) prescription drugs and insuhn (available
to recipients under State Medicaid Drug
Program);
(7) vending machine expenses;
(8) barber and beauty shop expenses;
(9) state or federal corporate income taxes,
plus any penalties and interest;
(10) telephone or television for personal use
of patient;
(1 1) penalties or interest on income taxes;
(12) dental expenses--except for consultant
fees as required by law;
(13) personal income taxes, plus any penalties
and interest;
(14)
(15)
(16)
(17)
(18)
(19)
(20)
farm equipment and other expenses;
retainers, unless itemized services of equal
value have been rendered;
physicians fees for other than utilization
review or medical directors or medical
consultants as required by law;
country club dues;
sitter ser\'ices or private duty nurses;
capital expenditures subject to either
section 1122 or certificate of need review
not receiving prior approval by the ap-
propriate state agency;
conversions, leases, and management
agreements not reviewed by the appropri-
ate state agency;
NORTH CAROLINA REGISTER
PROPOSED RULES
(21) guest tfa¥S7 meals;
(22) morgue boxes;
(23) leave days—except therapeutic leave;
(24) personal items and clothing, aft4 laun-
dering of personal clothing; and
(25) any other items which, under the given
circumstances, are considered to be non-
allowable.
(d) For those non-allowable expenses which
generate income, such as prescription drugs,
vending machines, barber and beauty shop, etc.,
expense should be adjuotod, identified as a non-
reimbursable cost center, where determinable.
If the provider cannot determine the proper
amount of expense which is to be adjuotod,
identified, then the income which was generated
must be offset in full to the appropriate cost
center.
Authority G.S. l08A-25(b); I08A-54; I08A-55;
S.L. 1985, c. 479, s. 86; 42 C.F.R. 447, Subpart
C.
.0104 COST REPORTING: ALDITING AND
SETTLEMENTS
(a) Each facilit>' that receives payments from
the North Carolina Medicaid Program must
prepare and submit a report of its costs and other
fmancial information such as the working trial
balance related to reimbursement annually. The
report must include costs from the fiscal period
beginning on October 1 and ending on Septem-
ber 30 and must be submitted to the state on or
before the December 3 1 that immediately follows
the September 30 year end. Facilities that file
reports after that date will be charged a penalty
of up to five hundred dollars ($500.00)per day for
each day after December 31 that the report is
delinquent. The Division of Medical Assistance
may extend the deadline for fiUng the report if in
its view good cause exists for the delay.
(d) The specific cost reporting guidelines re-
lated to this plan are set forth in the following
paragraphs. The state will publish guidelines,
consistent with the provisions of this plan, con-
cerning the proper accounting treatment for
items described in this Rule as related operating
expenses. These guidelines will be issued prior
to April 1, 1985. The guidelines may be subse-
quently modified prior to the beginning of each
cost reporting period. In no case, however, shall
any modifications be applied retroactively. A
provider should request clarification in writing
from the state if there is uncertainty about the
proper cost center classification of any particular
expense item.
(1) Nursing Cost Center includes the cost of
nursing staff, medical supplies, and related
operating expenses needed to provide
nursing care to patients, including medical
records, utilization review, the Medical
Director and the Pharmacy Consultant.
Also, the cost (rental or purchase) of spe-
cial equipment that is medically required
to sustain life may be charged to this cost
center. Such equipment shall include ox-
ygen concentrators, respirators and venti-
lators.
(2) Dietary Cost Center includes the cost of
staff, raw food, and supplies needed to
prepare and deliver food to patients.
(3) Laundry and Linen Cost Center includes
the cost of staff, bed linens - replacement
mattresses and related operating expenses
needed to launder facility provided items.
(4) Housekeeping Cost Center includes the
cost of staff and supplies needed to keep
the facility clean.
f^ Medical Ptooordo Cost C e nter includoo tbe
oxponoo noodod te maintain patient re-
cordo.
(4} £5} Patient Activities Cost Center includes
the cost of staff, supplies, and related op-
erating expenses needed to provide ap-
propriate diversionary activities for
patients.
f?) (6) Social Services includes the cost of so-
cial workers and related operating ex-
penses needed to provide necessary social
services to patients.
f8^ Utiliaatio H- R.evi e w includoo s& costs Fe-
quir e d te res'ie' . i i ' patient status.
(^ (7} Ancillary Cost Center includes the cost
of tl*» following special anoiUar)^ son'icoo:
Pi.adiolog'y, Ixiboratory, Physical Th e rapy,
Occupational Therapy, Spoooh Therapy,
Intravenous Fluids aft4 .Medicare Part S
bUlablo medical supplies. Providers must
bin Medicare Part ft fw thos e ancLUap > '
G e r i 'icos covered under that program, all
therapy services covered by the Medicaid
program and billable medical supplies.
Providers must bill Medicare Part B for
those ancillary services covered under the
Medicare B program.
f44) [8) Administrative and General Cost
Center includes all costs needed to ad-
minister the facility, including the staff
costs for the administrator, assistants,
bluing and secretarial personnel, personnel
director and pastoral expenses. It includes
the costs of copy machines, dues and
subscriptions, transportation, income
taxes, legal and accounting fees, start-up,
and a variety of other administrative costs
NORTH CAROLINA REGISTER
PROPOSED RULES
as set forth in the Chart of Accounts.
Interest expense other than that stemming
from mortgages or loans to acquire phys-
ical plant items should be reported here.
(444 (£2 Property Ownership and Use:
(A) This cost center includes all allowable
costs related to the acquisition and/or use
of the physical assets including building,
fixed equipment and movable equipment,
that are required to deliver patient care,
except the special equipment, as specified
in .0104(d)(1) of this Rule that may be
charged to the nursing cost center. Spe-
cifically it includes the foUowing items:
(i) all equipment expense regardless of
equipment nature,
(ii) lease expense for aft¥ aU physical as-
sets,
(iii) depreciation of assets utilizing the
straight line method,
(iv) interest expense of asset related li-
abilities, e.g., mortgage expense,
(v) property taxes.
(B) For the purposes of computing allow-
able lease expense and for balance sheet
presentation for Return on Equity com-
putations (see Rule .0105) leases shall not
be capitalized.
(C) In establishing the allowable cost for
depreciation and for interest on capital
indebtedness, with respect 10 an asset
which has undergone a change of owner-
ship, the valuation of the asset shall be the
lesser of allowable acquisition cost less
accumulated depreciation to the first
owner of record on or after July 18, 1984
or the acquisition cost to the new owner.
Depreciation recapture will not be per-
formed at sale. The method for estab-
lishing the allowable related capital
indebtedness shall be as follows:
(i) The allowable asset value shall be
divided by the actual acquisition cost,
(ii) The product computed in step 1 shall
be multiplied times the value of any re-
lated capital indebtedness,
(iii) The result shall be the liability
amount upon which interest may be
recorded at the rate set forth in the debt
instrument or such lower rate as the
state may prove is reasonable.
The allowable asset and liability values
established through the process in this
Rule shall be those used in balance
sheet presentations for return on equity
computation (see Rule .0105). These
procedures are established to implement
the provisions of PL 98-369 Section
2314.
f44) (10) Of)eration of Plant and Maintenance
Cost Center includes all costs necessary to
operate or maintain the functionality and
appearance of the plant. These include:
maintenance staff, utilities, repairs and
maintenance to all equipment.
f44^ (1 1) Equipment Expense. Equipment is
defmed as an item with a useful life of
more than two years and a value greater
than two hundred dollars ($200.00).
Equipment ownership and use costs shall
be reported in the Property Ownership
and Use Cost Center. Equipment main-
tenance and repair costs shall be reported
in the Operation of Plant and Mainte-
nance Cost Center. Equipment should
not be reported elsewhere.
(44) (12) Training Expense. Training expense
shall be allocated to the appropriate ben-
efiting cost centers. Adequate records to
support the allocation shall be maintained
and presented up>on request to establish
allowability.
(4-f^ (13) Home Office Costs. Home office
costs are generally charged to the Admin-
istrative and General Cost Centers. In
some cases, however, certain persormel
costs which are direct patient care oriented
may be allocated to "direct" patient care
cost centers vritb prior ad^ i ioo ef A« stat e
agency, if time records are maintained to
document the performance of direct pa-
tient care services. No Home office over-
head may be so allocated.
(44) (14) Management Fees. Management fees
are charged to the Administrative and
General Cost Center. In some cases,
however, a portion of a management fee
may be allocated to a direct patient care
cost center »ith prior advico »f tfee otato
agency, if time records are maintained to
document the performance of direct pa-
tient care services. The amount so allo-
cated may be equal only to the salary and
fringe benefits of persons who are per-
forming direct patient care services while
employed by the management company.
Adequate records to support these costs
must be made available to staff of the Di-
vision of Medical Assistance to support
these costs.
Authority G.S. 108A-25(b); I08A-54: /OSA-55;
S.L. 1985, c. 479, s. 86; 42 C.F.R. 447, Subpart
C.
10
NORTH CAROLINA REGISTER
PROPOSED RULES
.0107 PAYMENT ASSURANCE
(d) In all circumstances involving third party
payment, Medicaid is the payor of last resort.
No payment will be made for a Medicaid recipi-
ent who is also eligible for Medicare, Part A, for
the first 20 days of care rendered to skilled nurs-
ing patients. .Medicaid payments for co-insu-
rance for such patients wlU be made for the
subsequent 21st through the 100th day of care.
I lr-\<ti.^ii r r-\w . - 1 1 .-» l-> r--/~\ ■ir\i^fti-'^r\r>c-^ ^ i n 1 1 1^^ ^^^^^^^^^ ^^^ ^J^^
1 ITTtt^Pt^^T^ P^^^^^ tTJ LI lUUl LLl IV^^ ~~ LU l^V ULi 1 1 1 1. \JW l\J \.H\J
difToronco botWL ' on the amount pdi4 by Modicare
aft4 the rate ootabliohod by the state f»f the facil
ity invoKod. In the case of ancillary services
providers are obligated to:
(1) maintain detailed records or charges for
all patients;
(2) bill the appropriate Medicare Part B car-
rier for all services provided to Medicaid
patients that may be covered under that
program; and
(3) allocate an appropriate amount of ancil-
lary costs, based on these charge records
adjusted to reflect Medicare denials of
coverage, to Medicare Part B in the an-
nual cost report. For failure to comply
with this requirement, the state may
charge a penalty of up to 5 percent of a
provider's indirect patient care rate for
each day of care that is provided during
the fiscal year in which the failure occurs.
This penally shall not be considered an
allowable cost for cost reporting purposes.
Authority G.S. IOSA-25(b); I08A-54; 108A-55;
S.L. 1985, c. 479, s. 86; 42 C.F.R. 447, Subpart
C.
SECTION .0400 - PROVIDER FEE SCHEDULES
.59520 550.00
.90260
22.00
.59521
800.00
.90270
28.00
.59540
600.00
.90280
40.00
.59541
850.00
.90282
15.00
.59560
600.00
.90292
20.00
.59561
850.00
.90300
30.00
.59580
600.00
.90315
40.00
.59581
850.00
.90320
50.00
.90000
20.00
.90340
20.00
.90010
22.00
.90350
20.00
.90015
30.00
.90360
25.00
.90017
40.00
.90370
30.00
.90020
45.00
.90600
25.00
.90030
9.00
.90605
25.00
.90040
14.00
.90610
50.00
.90050
17.00
.90620
60.00
.90060
21.00
.90630
60.00
.90070
26.00
.90640
18.00
.90080
35.00
.90641
18.00
.90200
30.00
.90642
20.00
.90215
50.00
.90643
26.00
In addition fees for all specialties for early and
periodic screening, detection and treatment shall
be as follows:
Patient
Age
Fee
Birth to 4
B 30.00
4 and Over
45.00
(f) In no case
shall charges
for services provided
under the Medicaid Program exceed the provid-
er's customary charges to the general public for
such services.
Statutory Authority G.S. 108A-25(b): S.L.
c. 479, s. 86.
1985,
.0401 PHYSICIAN FEE SCHEDULE
(e) I» He ease shall chargoo fof oor . 'icoD provided
undor the Modicaid program oxcood the provid
ef^ customar)' chargoo te the gonorol public f»f
such soP i icos. Notwithstanding any of the fore-
going provisions of this Section the fees for the
following services shaU be paid to all Specialties
at the levels specified below. [The services are
identified by the identifying codes that are set
forth in the Physicians' Current Procedural Ter-
minolog\' Fourth Fdition (CPT-4) 1987 manual
published by the American Medical Association.)
Code
Fee
Code
Fee
.59400 $625.00
.59410 350.00
.90220 S 70.00
40.00
.595(10 5811.00
.59501 850.00
.90225
.90240
.90250
14.00
16.00
TITLE 15 - DEPARTMENT OF NATURAL
RESOURCES AND COMMUNITY
DEVELOPMENT
lyotice is hereby given in accordance with G.S.
I50B-I2 that the Division of Coastal Management
intends to amend the regulation cited as 15 NCA C
7 J .0409.
1 he proposed effective date of this action is Au-
gust I, 1988.
1 he public hearing will be conducted at 10:00
a.m. on May 26, 1988 at Ramada Inn, 170! S.
Virginia Dare Trail, Kill Devil Hills, NC 27948.
Co
' omment Procedures: A II persons interested in
these matters are invited to attend the public
NORTH CAROLINA REGISTER
II
PROPOSED RULES
hearing. The Coastal Resources Commission will
recei\'e written comments up to the date of the
hearing. Any persons desiring to present lengthy
comments is requested to submit a written state-
ment for inclusion in the record of proceedings at
the public hearing. Additional information con-
cerning the hearing or the proposals may be ob-
tained by contacting: Portia Rochelle. Division of
Coastal Management, P.O. Box 27687, Raleigh,
NC 27611-7687, (919) 733-2293.
CHAPTER 7 - COASTAL MANAGEMENT
SUBCHAPTER 7J - PROCEDURES FOR
HANDLING NLUOR DEVELOPMENT
PERMITS: VARIANCE REQUESTS: APPEALS
FROM MINOR DEVELOPMENT PERMIT
DECISIONS: AND DECLARATORY RULINGS
SECTION .0400 - FINAL APPROVAL AND
ENFORCEMENT
.0409 CIVIL PENALTIES
(a) Purpose and Scope. These Rogulationo
Rules provide the procedures and standards gov-
erning the assessment, remission, mitigation and
appeal of civil penalties assessed by the Coastal
Resources Commission and its delegates pursu-
ant to G.S. 113A- 126(d).
(b) Defmitions. The terms used herein shall
be as defmed in G.S. 1 13A-103 and as follows:
(1) "Commission" means the N. C. Coastal
Resources Commission;
(2) "Delegate" means the director or other
qualified employee of DNRCD to whom
the commission has delegated authority to
act in its stead in relation to the assess-
ment of civil penalties pursuant to this
Section;
(3) "Director" means the Director, QtTic e Di-
vision of Coastal Management;
(4) "Respondent" means the person against
whom a» ass e f .- im e nt has boon propos e d
ss¥rk a penalty has been assessed.
(c) WTion AGs e ssabl e . Civil penalties may be
assessed against any person who commits a vio-
lation as provided for in G.S. 1 13A-126(d)(r) and
1^ . .
f4-^ i* roquirod h^A fotfe te apply fo* »f t& se-
G««» a- pormit ro quired fe*r G.S. 1 13A 133,
ef who ' l iolatc'o ef foii* te a€4- m accord
ancL ' with the termc i , conditiono, e* Fe-
quirt ' mont ' j ef i . uch pormit;
(-3^ foife to fii^ oubmit, »f mak e available, as
the es€e may ber aft¥ documontr . , 4ate ef
reports required by the cotnmic i oion pur
ouant te- th** article;
(4) refuc . es access te- the commission ef its
duly designated represontati' i o. whe' has
Gufiiciontly identified himoolf ^^t
official crodontialo, te ft»y promisos. Ret
including afty occupied dsvoUing house »f
curtilage, ier the purpooo ^ conducting
aft investigation provided fof m this arti-
commJGsion implomonting the pro' i -isions
ef this article; provided, howevor, that this
paragraph sh^ net apply t» r e gulations
relating te minor de' i 'olopmonto.
(d) Notice of Violation. The commission may
deoignate as^ authoriz e designates and authorizes
employees of the DNRCD to issue in the name
of the commission notices of violation to any
person engaged in an activity which constitutes
a violation for which a civil penalty may be as-
sessed. Such notices shall set forth the nature of
the alleged violation, shall request that the illegal
activity be ceased, and shall be delivered per-
sonally or by registered or certified mail. As soon
as is feasible a notice will be followed by a pro
pooal te aoGoos a eivit penalty assessment or ac-
tion to pursue some other appropriate remedy.
(e) Notice of Proposals ¥e Assoss Assessment.
(1) The commission ©t its dologate may pro
pose te assoss a p e nalty by notifying the
person against whom the assossmont is a
penalty by notifying the person against
whom the assossmont is proposod by Feg-
istorod ©f cortifiod mail. Any person
against whom a penalty is assessed shall
be notified by certified or registered mail.
The commission hereby delegates to the
director of the OfTio e Division of Coastal
Management the authority to propose as-
s e ssment »f assess civil penalties according
to the procedures set forth in this R e gu
lation. Rule. The director shall propose
aft assossmont assess a civil penalty of not
less than fifty dollars ($50.00) for a minor
development violation or not less than
one hundred dollars ($100.00) for a major
development violation in all cases where
he has d e t e rmin e s determined that there
is probable cause to believe that the re-
spondent has committed a violation and
that other available remedies are inappro-
priate or inadequate.
(2) The notice of a proposed assessment shall
specify the reason for assessment and shall
inform the assessed person of the right to
appeal the assessment by filing a petition
for a contested case hearing with the Of-
fice of Admmistrati\e Hearings pursuant
to G.S. 150B-23. the date ef the proposed
administrati' i 'o hearing concerning the as-
Dossmont, aft4 Fftay specify the amount »f
12
NORTH CAROLINA REGISTER
PROPOSED RULES
tiw proposed aoGoooment. ¥b« hoaring
mailing ef tb© notice ef Ae propoood as-
ootiomont.
(3) Upon receipt of the proposed assessment,
the respondent shall immediately cease all
of those activities which the propoood as-
sessment sets forth as the reason(s) for the
assessment pending the result of any ad-
ministrative hearing or superior court
proceeding held pursuant to the pro-
visions of this Rule,
(f) Amount of Assessment.
(1) A civil penalty of not more than two
thousand five hundred dollars ($2,500)
may be assessed for any violation.
(2) If any action or failure to act for which a
penalty may be assessed under this Rule
is willful, the commission or its delegate
may assess a penalty not to exceed two
thousand five hundred dollars ($2,500) for
each separate violation, after th« fifst as-
Gooomont, provided, how e ver, tbat- »»
penalty bhall be imposed under tfeis Rule
pending court rei i 'iew »f a ftpst- assessment,
which has been properly appealed. If any
person continues to violate by action or
inaction any rule or order of the commis-
sion after receipt of proper written notice
from the Division of Coastal Management
each day the violation continues or is re-
peated may be considered to constitute a
separate violation subject to the foregoing
penalties.
(3) In determining the amount of the penalty
the commission or its delegate shall con-
sider the degree and extent of harm caused
by the violation and the cost of rectifying
the damage. In determining the degree
and extent of harm caused, the commis-
sion may consider the duration of the vi-
olation, damage to public resources,
damage to private property, effectiveness
of preventive and restorative measures
taken by the assessed person, the previous
record of the assessed person in complying
or not complying with the laws and regu-
lations implemented by the commission;
and any other factors relevant to the harm
caused by an alleged violation.
(4) Pursuant to Subparagraph (f)(3) of this
Rule, civil penalties for major develop-
ment violations shall be assessed in ac-
cordance with the following criteria.
Assessments resulting from any unau-
thorized development within a designated
Area of Envirorunental Concern which do
not fit the following criteria shall be made
using the best information available at the
time of the violation and from subsequent
investigation.
(A) Unauthorized development which
could have been permitted under coastal
management regulations shall be subject
to tfee a minimum civil penalty of one
hundred dollars ($100.00). This category
shall include only development that can,
at the time of assessment, meet al[ of the
following four criteria:
(i) consistency with the local land use
plan;
(ii) consistency with AEC standards and
state guidelines;
(iii) proof of notification of adjacent ri-
parian property owners; and
(iv) no substantial objections from these
adjacent riparian property owners.
(B) Civil penalties for development which
could not have been permitted under
coastal management regulations shall be
assessed as foUows. This category shall
include development that is sufficiently
inconsistent with LUP's I .and Use Plans,
AEC standards and/or state policies to
have warranted denial if the permit appli-
cation process had been followed. In all
cases, restoration shall be required to the
fullest extent practicable consistent with
the need to avoid additional damage to
the resources and penalties shall be as-
sessed as follows:
(i) Development which involves wetland
alteration or other damage which 6a»
b© has been completely restored with
no permanent or irreversible losses of
productivity shall be subject to the mi-
nimum civil penalty of one hundred
doUars ($100.00).
(ii) Development which does not involve
permanent or irreversible losses of re-
sources, but cannot be adequately re-
stored or af» is of such a nature that it
r e fl e ct reflects a reckless disregard for
their its impact or have has a high po-
tential for permanent, long-term or ir-
reversible losses of resources shall be
restored to the fullest extent practicable
and shall be subject to a civd penalty
one-half of that specified for the area
affected according to Schedule A of this
Rule.
(iii) Development which involves wet-
lands alteration or other damage which
causes permanent or irreversible losses
of coastal resources shall be restored to
the fullest extent practicable and shall
NORTH CAROLINA REGISTER
13
PROPOSED RULES
be subject to a civil penalty of an
amount graduated according to Sched-
ule A.
(iv) For development that does not in-
volve disruption of an area of a specific
size, has an undetermined impact, or
impacts that are difTicult or impractical
to determine, reflects a reckless disre-
gard for the rogulationo rules and/or has
a high potential for permanent or irre-
versible losses of resources, the violator
shall be required to restore to the fullest
extent practical and shall be subject to
the minimum Si 00 one hundred doUar
($100.00) assessment, fof tfe« fifst e^
tef dovulopmunt activity within tl*e
sam e AliC, tb« proooding asoaosment
IT f » 1 1 ii^ i1^^11^^^^u4 t /-\ T- il^^ ^^^^^^^^^ QJ^^l ^^^^^^
oucoooding offonDO.
(v) Dovolopmcnt in' . 'oKing » partial »f
comploto structuro wliich doos net-
comply with location ©f ootbaok stand
afds C ' hall b* romovod to comply with
applicablo standards afl4 Ae liable party
shall be assess e d ti*e mirmnum penalty
r-t 4 ^vjT^i Vi 1 1 «-i ,--1 J-.U-1 j-l /-> 1 1 ■-> re- (^L^^iL\^A^^^^ ^i Ij^^
Structuro is He4- removed, the liabl e
party shall be subject to a fift© ef twe-
thousand five hundred dollars (S2500)
fof habitable structur e s aft4 frw» hun
over dunes afi4 similar small, non ha
bitable structures. U appropriate, a
court order shall be sought to compel
relocation ef the structure m compU
an CO witb location standards. Any
structure or part of a structure that is
constructed in violation of a rule or or^
der of the commission and is inconsist-
ent with applicable .guidelines for
development shall be removed or mod-
ified to those guidelines and the liable
party shall be assessed the minimum
penalty of one hundred dollars
($100.00). If the structure is not re-
moved or modified as requested by the
Division of Coastal .Management, a
court order will be sought to compel
the necessar>' removal or modification
and the liable party shall be subject to
continuing assessment according to
Subparagraph (f)(4)(G) of this Rule.
(C) Violations resulting from non-compli-
ance with permit conditions or specifica-
tions shall be evaluated according to their
temporary or permanent adverse impacts
on wetlands, water quality, fishery re-
sources, primary nursery areas, mudflats,
and/or primary dunes. If the preceding
impacts occur, restoration shall be re-
quired to the extent practicable and the
amount of the assessment shall be deter-
mined in accordance with Subparagraph
(f)(4)(B) of this Rule. If there has been
no resource loss and the project is con-
sistent with the AEC standards, the as-
sessment shall be determined in
accordance with Subparagraph (f)(4)(A)
of this Rule. Such permit conditions vi-
olations shall include, but not be limited
to, the following:
(i) failure to honor the shrimp develop-
ment moratorium;
(ii) failure to excavate behind a silt screen
or earthem plug;
(iii) failure to stabilize spoil material;
(iv) improper operation of a disposal
area;
(v) location of a spoil disposal area out-
side of permitted boundaries;
(vi) depth of excavation exceeding per-
mitted limits; or
(vii) bulkhead alignment outside of per-
mit specifications.
(D) Assessments for violations by public
agencies (i.e. towns, counties and state
agencies) shall be determined in accord-
ance with Subparagraphs (f)(4)(A), (B)
and (C) of this Rule.
(E) Willful and intentional violations. The
penalty assessed under the criteria listed in
Subparagraphs (f)(4)(A),(B) and (C) of
this Rule shall be doubled for willful and
intentional violations except that the
doubled penalties assessed under this Sec-
tion may not exceed two thousand five
hundred dollars ($2500) and in no case be
less than five hundred dollars ($500.00) for
each separate violation. A violation shall
be considered to be willful and intentional
when:
(i) The violator has received clear and
direct instructions from a representative
of the Division of Coastal Management
that a permit would be required for the
proposed development and the violator
subsequently undertook development
without a permit; or
(ii) The violator has committed previous
violations involving the same or similar
development activities in the same
AEC.
(iii) The violator has refused or failed to
restore a damaged area as requested by
the Division of Coastal Management
14
NORTH CAROLINA REGISTER
PROPOSED RULES
pursuant to a restoration agreement or
as required under the schedule for civil
penalty assessments as set out in Sub-
paragraphs (0(4)( B) and (C) of this
rule, if appropriate a court order shall
also be sought to require restoration.
The minimum penalty assessed under
Subparagraph (0(4)(E)(i) of this Rule
shall be five hundred doUars ($500.00).
(F) Assessments against contractors. Any
contractor, subcontractor, person or
group functioning as a contractor shjdl be
subject to a notice of violation and as-
sessment of a civil penalty as follows:
(i) For the fu^st violation, the
contractor(s) shall receive a notice of
violation and no civil penalty shall be
assessed;
(ii) For the second and each succeeding
ofTunoo violation within the same AEC,
the contractor(s) shall be assessed a
penalty in accordance with Subpara-
graph (0(4) (A),(B) aft4 (e^ of this
Rule. Such penalty shall be in addition
to that assessed against the landowner.
When a pcnaltv is being doubled pur-
suant to Subparagraph (f)(4)(F') and the
element of willfulness is present only
on the part of the contractor, the land-
owner shall be assessed the initial por-
tion of the penalty and the contractor
shall be assessed the doubled portion.
(G) Continuing violations.
(i) ;\ny development in violation of
CAM A permit requirements that con-
tinues after receipt of p roper notice
from the Division of Coastal Manage-
ment may be subject to a minimum
daily penalty of fi\'e hundred doUars
($500.00) as estabUshed b^ (f)(E)(i) of
this Rule.
(ii) Refusal or failure to restore a dam-
aged area as requested by the Division
of Coastal Management may be con-
sidered a continuing violation and shall
be subject to the minimum penalty of
one hundred doUars ($100.00) per day
if such refusal or failure to restore does
not result iri additional environmental
resource damage or loss. When re-
sources continue to be affected by the
\iolation. the amount of the penalty
will be determined according to
(f)(4)(B) of this Rule. The continuing
penalty period will be calculated from
the date of receipt of the notice of con-
tinuing \iolation and run until:
(1) the division's order is satisfied, or
(II) the party enters into good faith
negotiations with the division, or
(III) the party contests the division's
order in a judicial proceeding by
raising a justifiable issue of law or fact
therein.
The continuing penalty period will
resume if the party terminates nego-
tiations without reaching an agree-
ment with the division, fails to
comply with court ordered restora-
tion, or fails to meet a deadline for
restoration that was negotiated with
the division.
(5) Pursuant to Subparagraph (f)(3) of this
Rule, civil penalties for minor develop-
ment violations shall be assessed in ac-
cordance with the following criteria:
(A) Development which could have been
permitted shall be assessed a minimum
civil penalty of fifty dollars ($50.00). This
category shall include only development
that meets all of the following criteria:
(i) consistency with the local land use
plan;
(ii) consistency with AEC standards and
State guidelines; and
(iii) no significant objections from adja-
cent property owners.
(B) Civil penalties for development which
could not have been permitted, that is
those activities that are sufficiently incon-
sistent with LUP's, AEC standards or
other state guidelines to have warranted
denial if the permit application process
had been followed, shall be assessed as
follows:
(i) Development which resulted in no
resource damage shall be brought into
compliance with provisions of the local
land use plan, AEC standards and other
state guidelines and assessed a civil
penalty of one hundred dollars
($100.00);
(ii) For development which involves re-
source damage that can be completely
restored so that there will be no per-
manent or long-lasting impacts, the vi-
olator shall be required to restore to the
fullest extent practicable and shall be
assessed a civil penalty of one hundred
doUars ($100.00);
(iii) Development which violates estua-
rine shoreline AEC standards such that
there wUl be permanent or long-lasting
impacts on estuarine water quality shall
require restoration to the fuUest extent
practicable and shall be assessed a civil
NORTH CAROLINA REGISTER
15
PROPOSED RULES
penalty of two hundred fifty dollars
($250.00);
(iv) Disturbance or reduction of a pri-
mary or frontal dune by less than one-
third aft4 less than two thirds of its
height or width shall require restoration
to the fullest extent practicable and
assessment of a civU penalty in the
amount of one hundred fifty dollars
($150.00);
(v) Disturbance or reduction of a primary
or frontal dune by more than one-third
of its height or width and less than
two-thirds of its height or width shall
require restoration to the fullest extent
practicable and assessment of a civU
penalty in the amount of two hundred
doUars ($200.00);
(vi) Disturbance or reduction of a dune
by more than two-thirds of its height
or width shall require restoration to the
fullest extent practicable and assessment
of a civil penalty in the amount of two
hundred fifty dollars ($250.00);
(vii) Filling with unauthorized materials
and/or covering natural dune vegetation
shaU require restoration to the fullest
extent practicable and assessment of a
civil penalty in the amount of two
hundred dollars ($200.00).
(C) Violations resulting from noncompli-
ance with permit conditions or specifica-
tions shall be treated as activities which
may or may not have been permitted as
in Subparagraphs (f)(5)(A) and (B) of this
Rule.
(D) Violations of public agencies (i.e.
towns, counties and state agencies) shall
be handled by the local permit officer or
authorized DCM staff within their re-
spective jurisdictions except that in no
case shall a local permit officer handle a
violation committed by the local govern-
ment he represents. Penalties shall be as-
sessed in accordance with Subparagraphs
(0(5)(A),(B) and (C) of this Rule.
(E) For the following types of violations
civil penahies assessed pursuant to the
criteria listed in Subparagraphs (f)(5)(A),
(B), (C) and (D) of thi's Rule shall be
doubled, but shall in no case exceed two
hundred fifty doUars ($250.00) for each
separate violation:
(i) Violations that are willful and inten-
tional or reflect a careless and reckless
disregard for their impact. A violation
shall be considered to be willful and in-
tentional when the violator has received
clear and direct instructions from the
LPO or a DCM representative prior to
violation that the activity would be in
violation of CAMA standards, state
guidelines or the local land use plan or
requires a permit. In such cases, each
day the action or inaction continues af-
ter notice of violation shall be consid-
ered a separate violation and may be
assessed a separate penalty,
(ii) Where the violator refuses to restore
a damaged area or fails to restore it as
requested by the LPO or authorized
DCM staff. If appropriate, a court or-
der shall be sought to require the proper
restoration.
(F) Assessments against agents or contrac-
tors. An agent or contractor judged to
be solely responsible for a violation shall
bear the full cost of the assessment. If an
agent or contractor is only partly respon-
sible for a violation, he may be required
to pay a portion of the assessment. If the
element of willfulness referenced in Sub-
paragraph (f)(5)(E) of this Rule is present
solely on the part of the agent or contrac-
tor the doubled portion of the civil pen-
alty assessed pursuant to that
Subparagraph shall be assessed against the
contractor, provided that the party pri-
marily responsible for the violation shall
be assessed the base penalty in accordance
with the criteria set out in this Rule.
SCHEDULE A
Size of Violation (sq.ft.)
Resource
Affected
1. Primary
nursery
area
2. Submergent
native
vegetation
3. S. alter-
niflora
regularly
flooded
4. S. alter-
niflora
(irregu-
larly
flooded)
Juncus
11,001-
15,000
$ 2,500
$ 2.500
1,500
1,250
16
NORTH CAROLINA REGISTER
PROPOSED RULES
roemen-
anus
15,001-
20,000
%
20,000
25,000
> 25,000
2,500
2,500
2,500
2,500
2,500
2,500
2,000
2,500
2,500
1,750
2,250
2,500
(g) Payment and Remission/ Mitigation.
(1) Within ^ 20 days after receipt of notifi-
cation of a propooal t» aBooss, civil penalty
assessment, the poroon against whom tb©
aooQoomont ka« boon propoood respondent
must tender payment to the department,
©F submit a written requ e st that th» h e ar
iftg b» he}4 sp e cifying the factual and/or
legal iosuos m disputo, petition for a con-
tested case hearing pursuant to G.S.
150B-23, or submit in writing a request
for reduction of the penalty stating the
reason(s) why such a request is justified.
(2) The director may modify the propoood
penalty to a lower amount upon fmding
additional or different facts which should
be or should have been considered in de-
termining the amount of the propoood as-
sossmont. penalty.
(3) The director will accept and acknowledge
all tenders of payment on behalf of the
commission.
(4) Requests for reduction of a penalty are
solely for the purpose of allowing the as-
sessed person to contest the reasonable-
ness of the penalty. A reduction
procedure is not the proper context in
which to contest facts or raise questions
of law. A request for reduction must in-
clude:
(A) a written statement justifying the re-
duction,
(B) an acknowledgment of a civil liability
as set out hf m the fmdings of fact and
decision, assessment, and
(C) a waiver of the right to an administra-
tive contested case hearing.
(5) If the director determines that the re-
duction request raises issues of fact or
questions of law, he shall tr e at th« Fe-
duotion roquoGt as a roquoot fef adminio
trativo oontootod ease hoaring. advise the
assessed person to submit a petition for a
contested case hearing pursuant to G.S.
1508-23. There is no right to appeal a
reduction decision to superior court. The
assoQood p e rson respondent should request
an administrative contested case hearing
if he wishes to be able to seek review in
superior court.
(6) fte aosoBsed poroon ondtho departmont
vrtH hav e tbe opportunity te prooont efal
arguments te the commission m support
ef ef opposition te th« reduction. If the
director denies a reduction request, the
respondent may request review of that
decision by the commission. The argu-
ments to the commission shall be limited
to the reasons stated in the written request
for reduction. U th» asoooood poroon raiooo
Bew issuos iof t^ &«t tH»e m arguments
boforo th« commission, the oommiooion,
m its dioorotion, shall disregard such orgu
ments et shall ordor an administrativo
contootod ease hearing te h» h«14 te fully
dovolop the aew ioouoo.
(h) Hearings and Final Assessment.
(+) fh% commission may dologato th« power
t» conduct a hoaring e» its behalf t» any
member ef the commiooion, ef t» aay
qualifiod omployoo »f the department .
Afty poroon t© whom such a dologation
»f powd e r is mado shall proporo fef the
commission a record ef the hoaring afi4
the ovidonoo aft4 his recommondations fo*
a docision concerning the asoooomont.
(5^ A«y hearing concerning aft assoosmont
shall be conducted ift accordanoo with the
procoduroo set forth i» GtSt 113A 136(d),
afi4 with the procedures set forth i» See-
tie» .0300 »f this Subohaptor aft4 ift lArti
inconsist e nt with G.S. 113A 136(d) ef
advortisomonts shall be required.
^^^^L ^^ ^1^^^ j^^^^^^^^j^i ^^^^^^^^^^4 ^^^^j^yyv ^j^^i I
^^^T ^T ^^^V ^^^^^^^^T tfCt^^^^^T ^^T^TTTTT T^^TT I
is proposed do e s set within ^ days aftor
roooipt ef notification ef the proposal *«•
1 ^-^-1 UV^Jl lllUl CIIV IIVIU Ulg Vh^J llVI^Tj \J1. ^^T^TllUT
i» writing a roquost fo* reduction ef the
penalty, theft the commission ef a d«iy
appointed hoaring officer may proceed
with the hoaring, grant a continuance,
dismiooal, &f other disposition as he dooms
appropriate, if the hearing is conduct e d
ef a decision r e ached ift the absence ef a
party, the absent party B»y p e tition the
commiooion ef the hoaring officer, te Fee-
L^H II 11 T^ \.MVt\J , U\1\JIX CT L'^-'l 1 1 1 VI 1 UI lUET l-^^J
grant e d eftly when p e titioner 6a» show
that the r e asons fof his failur e te app e ar
wor e oxcusablo afi4 that fairness requires
rooponing the cas e . The docision hy- the
hearing offioor shall be ift writing, shall he
NORTH CAROLINA REGISTER
17
PROPOSED RULES
(4)
Don^od »» th« p e titioner, aft4 ohoU b»
made a part ©f Ae rocord.
Final decisions in contested case hearings
concerning assessments shall be made by
the commission. A majority oi tb» com
r^^^a^^^j^T ^r^^TTT^^Cr^ ^n^^^T L^J L? I V^.^. Ill UI (Jl UOT
to mal<e a feai decision unlooo aii parties
agroo te- waive tfei* roquiromont. Only
those oommission members wbe afe pte-
hearing is reported te tbe commission by
aft appoint e d hearing offic e r, as th© ease
may ber shall be qualified to ¥et« con
coming a» assessment. A fiftai decision
concerning aft assessment shall be made
by concurrence »f a majority b^ thooo
commission members who afe qualified
♦ j~» T_t£^±^i ■-> -ri ---1 n -t-i r-v ^ra ^^^^^^^i4 ^i ^l^^ JiQ^^i
f.\J f L7 IVJ LU IVX tTTTTT 1X1 U TTT^T^^TTT Lit I IIV TTTTT^
»f tbe fmal decision. The fmal decision
shall be based on evidence in the official
record of the contested case hearing, the
administrative law judge's recommended
decision, anv exceptions filed by the par-
ties and oral arguments. Oral arguments
shall be limited to the facts in the official
record.
(i) Referral. If any civil penalty as fmally as-
sessed is not paid, the director on behalf of the
commission shall request the Attorney General
to commence an action to recover the amount
of the assessment.
(j) Reports to the Commission. Action taken
by the director wiU be reported to the commis-
sion at the next meeting. Such reports wiU in-
clude information on the following:
(1) person(s) issued letter(s) of proposed as-
sessment;
(2) person(s) who have paid a penalty as a
result of a proposed assessment, requested
remission, or requested an administrative
hearing;
(3) person(s) who have failed to pay; and
(4) cases referred to the Attorney General for
collection.
(k) Judicial Review. .Any Person who has been
notified of a fmal assessment may apply to the
superior court of the county where such person
resides for review of the hearing and assessment
and the scope of the court's review of the com-
mission's action (which shall include a review of
the amount of the assessment), shall be as pro-
vided in G.S. Chapter \SS^Ar 150B. If the per-
son assessed fails to pay the amount of the fmal
assessment to the department within 30 days after
receipt of notice, or such longer period, not to
exceed 180 days, as the commission may specify,
the commission may institute a civil action in the
superior court of the county in which the person
assessed resides or has his or its principal place
of business, to recover the amount of the assess-
ment. In any such civil action, the scope of the
court's review of the commission's action (which
shall include a review of the amount of the as-
sessment), shall be as provided in G.S. Chapter
440Ar 150B.
(1) Settlements. The Coastal Resources Com-
mission hereby delegates to the director the au-
thority to enter into a settlement of a civil penalty
appeal at any time prior to fmal decision in an
administrative contested case hearing. Such set-
tlements shall not require the approval of the
commission and shall not be considered a final
commission decision for purposes of G.S.
1 13A-123. Any settlement agreement proposed
subsequent to a fmal commission decision in the
contested case shall be submitted to the com-
mission for approval.
Statutory Authority G.S.
H3A-124(c)(5); 1 13A- 126(d).
II3A-I24(c); -
TITLE 20 - DEPARTMENT OF STATE
TREASURER
lyotice is hereby given in accordance with G.S.
J SOB- J 2 that the State Treasurer and The Local
Government Commission intends to adopt regu-
lations cited as 20 NCAC 7 .0/07, .0505; and
amend regulations cited as 20 NCAC 7 .0102 -
.0/03, .0/05 - .0/06, .0202, .0304, .050/ -.0502,
.0504.
1 he proposed effective date of this action is Au-
gust J, /988.
1 he public hearing will be conducted at /0:00
a.m. on May //, /988 at Conference Room, Room
/OO, 325 North Salisbury St., Raleigh, NC.
y^omment Procedures: A written copy of the
comments will be required of all persons wishing
to speak at the public hearing. The hearing record
will remain open for written comments from April
4, /988 to May 4, 1988. Written comments
should be sent to the APA Coordinator, 325 North
Salisbury St., Raleigh, NC.
CHAPTER 7 - COLLATERALIZATION OF
DEPOSITS
SECTION .0100 - GENER.AL
.0102 DEFINITION OF TERMS
The words and phrases defmed in this Rule will
have the meanings indicated when used in this
18
NORTH CAROLINA REGISTER
PROPOSED RULES
Chapter, unless the context clearly requires an-
other meaning:
(4) "Deposit Insurance" means the insurance
provided by the Federal Deposit Insurance
Corporation, and the Federal Savings and
Loan Insurance Corporation. a«4 tbe
North Carolina Savings Guaranty Corpo
ration.
Statutory Authority G.S. ll5C-444(b); 147-79;
159-31 (b).
.0103 NOTIFICATION BY DEPOSITOR
(b) As of Docombor 34- June 30 of each year,
or when requested by the State Treasurer, the
custodian shall provide the depository Form
INV-91 "Public Deposit Status Report", listing
the current account names and numbers of all
pubhc deposit accounts, and shall provide a du-
plicate copy to the State Treasurer. Form
INV-91 shall be certified by the custodian that
the statements are correct.
Statutory Authority G.S. ll5C-444(b); 147-79;
I59-3l(b).
.0105 METHOD OF EXERCISING THE
OPTION
(b) If the depository selects Option 2, it shall:
file Form INV 92 "Elootion ef Option 3^ with
the ouotodian aft4 the Stato Troaouror fof each
cuotodian, notifying thorn that- it- has opted te-
pool the collateral »f aU public d e poeits through
the State Troaouror.
(1) Submit to the State Treasurer a letter of
intent, indicating the date it intends to
elect Option 2^ which shall not be prior
to the date the requirements of Items 2^
3j and 4 of this Paragraph are met.
(2) Submit to the State Treasurer all executed
escrow agreements required to comply
with Rule .03Q3(b).
(3) Submit to the State Treasurer Form
INV-99, "Selected Financial Data," re-
ferred to in Rule .0501(c).
(4) Submit to the State Treasurer Form
INV-97, "Annual Report on Public De-
posits" referred to in Rule .0502(c); how-
ever, the report shall be for the period
immediately preceding the date of the
election of Option Z
(5) Submit to each custodian Form INV-92,
"Flection of Option 2," notifying them
that it has opted to pool the coUateral of
all public deposits through the State
Ireasurer: and provide the State Freasurer
a duplicate copy of all "Flection of Op-
tion 2" forms.
Statutory Authority G. S. ll5C-444(b); 147.79;
159-31 (b).
.0106 FORMS
The following forms shall be promulgated by
the State Treasurer and shall be used for the
purpose outlined in this Chapter unless specific
permission is given to use a substitute:
(21 INV-99 Selected Financial Data.
Statutory Authority G.S. ll5C-444(b); 147-79;
159-31 (b).
.0107 DUTY OF DEPOSITORY
By accepting public deposits, the depository as-
sumes the duty and responsibility of maintaining
adequate collateral as provided by law and in ac-
cordance with the provisions of this Chapter, for
all uninsured deposits in accounts for which the
custodian has notified the depository pursuant to
Rule .0103 of this Chapter.
Statutory Authority G.S. ll5C-444(b); 147-79;
159-31 (b).
SECTION .0200 - SECURITIES TO BE
DEPOSITED
.0202 AMOUNT OF COLLATERAL REQUIRED
TO BE PLEDGED
(a) Under Option 1, each depository, which is
required to pledge collateral to secure the deposit
of public moneys, shall maintain collateral with
an escrow agent equal to or in excess of 100 per-
cent of the total amount of all deposits to the
credit of the custodian less the allowable credit
for deposit insurance.
(b) Under Option 2, the amount of required
collateral shall be the sum of the amounts re-
quired to be collateralized for all depositors in the
fmancial institution calculated as follows:
(1) Demand Deposits. 100 percent of the
average daily balance for the calendar year
to date, or 100 percent of the average daily
balance for the immediate preceding three
calendar month period, or 100 percent of
the average daUy balance for the current
month to date, or such other balance as
shall be given prior approval by the State
Treasurer, less the applicable deposit in-
surance for each depositor. Calculations
171 r IXl IT UU F tTT^T^^T mWTT II WJ IxXx^ tiU T \Jl. \ 1 l\J
month for any period other than the
"current month to date" method may be
based on the period ending the last day
of the prior month. At the option of the
State Treasurer, the Treasurer may require
calculations to be in accordance with the
NORTH CAROLINA REGISTER
19
PROPOSED RULES
requirements of an Option ]_ depository,
if it 15 deemed that the avcradn.g method
for a particular depositor^" does not accu-
rately reflect the amount of deposits to be
secured.
(2) Time Deposits, j^ percent of the actual
current balance, less the applicable deposit
insurance for each depositor.
(c) The ma.ximum amounts of deposit insur-
ance which may be accepted shall be one hun-
dred thousand dollars ($100,000) on demand
deposits and one hundred thousand dollars
($100,000) on time deposits. An unused amount
of insurance may not be applied to another cus-
todian or to another type of deposit. The de-
posits in the name of the individual school
treasurers shall be allowed one hundred thousand
dollars ($100,000) total insurance on both time
and demand deposits.
(d) All eligible secunties pledged shall be valued
at pafr current market.
(e) The custodian in the case of public deposits
separately collateralized and the State Treasurer
may require additional the amount of collateral
to be pledged by the depositor,' to be ten percent
greater than the amount required under this
Rule, il' the market value of pledged securities is
below the amount reasonably required to insure
pubhc deposits against the risks apparent at the
time of the request.
Statutory Authority G. S. II5C-444(b): 147-79;
1 59-3 1(b).
SECTION .0300 - ESCROW OF SECURITIES
.0304 PLEDGING: RELEASING AND
SLBSTITLTING COLLATERAL
(a) All pledges and releases of collateral to or
from an escrow account shall be carried out by
means of Form INV-95 "Request for CoUateral
Change". The fonn shall require the following:
(1) Amount and description (includmg Cusip
numbers) of securities to be released and
pledged;
(2) The effect of the transaction(s) on the total
collateral pledged, including the percent-
age of excess then pledged, if a decrease;
Statutory Authority G. S. 115C-444{b); 147-79;
1 59-3 1(b).
SECTION .0500 - REPORTING
.0501 QLARTERLY REPORTING
(a) In the case of Option 1, each depository
shall report to the custodian the total par value
and market value of securities pledged on the last
day of the calendar quarter with the escrow
agent(s) to secure public deposits. The report
shall be submitted no later than the last day of
the following month.
(b) In the case of Option 2, each depository
shall submit Form INV-96 "Quarterly Report
on Public Deposits" to the State Treasurer no
later than the last day of the month following the
end of the calendar quarter. The report shall be
dated on the last working day of the calendar
quarter, shall summarize the accounts to be se-
cured, shall summarize the amounts insured and
secured at market, shall indicate the amount and
percentage of excess collateral pledged, and shall
be certified by an authorized officer of the de-
pository that the statements are correct.
(c) In addition to the Quarterly Report re-
quired by Rule .0501(b) in this Rule, Option 2
institutions shall submit to the State Treasurer
Form INV-99 "Selected Fmancial Data." which
is a report containing selected fmancial data con-
tained in either the current quarterly report of
condition required by the Federal Deposit Insur-
ance Act (12 U.S.C.) or the current quarterly re-
port required to be filed with the Federal Home
Loan Bank Board, as applicable.
Statutory Authoritv G. S. 115C-444(b); 147-79;
159-31 (b).
.0502 .ANNUAL REPORTING
(a) In the case of Option 1 , on or before July
31 of each year, the depository shall submit to
the custodian, Form INV-98.
(b) In the case of Option 2, on or before July
31 of each year, each depositor,' shall submit to
the State Treasurer, Forms INV-97 and INV-98
in addition to witfe the quarterly report (INV-96)
dated June 30.
(c) Form INV-97 "Annual Report on Public
Deposits" shall be dated June 30, shall list all
depositors, and for each depositor, show the
amounts on deposit by type, identify the
amounts insured by type, and shall be certified
by an authorized officer of the depository that the
statements are correct.
(d) Form INV-98 "Annual Report on Collat-
eral for Public Deposits" shall be dated June 30,
shall list and describe all collateral pledged (in-
cluding CUSIP number par and market value),
with each escrow agent for the custodian or State
Treasurer, and shall be certified by an authorized
officer of the depositor)' that the statements are
correct.
(e) The depositor,' may substitute his own
format for Fo^-m INV-97' and Form INV-98,
provided the format is substantially the same in
content and order of presentation.
20
NORTH CAROLINA REGISTER
PROPOSED RULES
Statutory Authority G. S. ll5C-444(b); 147-79;
l59-3l(b).
.0504 SPECIAL REPORTING RULE FOR
OPTION I DEPOSITORIES
A depository which has State funds and which
has not elected Option 2 shall file the reports re-
quired in Paragraphs .0501(a), .0501(c), and
.0502(a).
Statutory Authority G.S. II5C-444(b); 147-79;
l59-3l(b).
.0505 ADDITIONAL MONTHLY REPORTING
REQUIREMENTS
In the case of Option 2, the State Treasurer may
at any time and at his own discretion direct the
depository to file a report in the same format as
the Quarterly Report required by Rule .0501(b),
but on a monthly basis. However, the monthly
reporting directive shall be required under any
one of the following circumstances:
(1) A required report is repeatedly not filed
timely.
(2) A required report is filed with a material
error.
(3) A Quarterly Report required by Rule
.0501(b) is filed indicating that "excess" col-
lateral pledged is less than ten percent of the
amount required by Rule .0202.
(4) The depository has been notified that the
State Treasurer has invoked Rule .0202(e),
requiring additional collateral calculations.
Such monthly reporting directive shall be effec-
tive for a period of six months, after which time
the depository may resume quarterly reporting.
However, subsequent violations shall extend the
period of monthly reporting as set forth in this
Rule.
Statutory Authority G.S. ll5C-444(b); 147-79;
l59-3l(b).
TITLE 24 - INDEPENDENT AGENCIES
1\ otice is hereby given in accordance with G.S.
I SOB- 1 2 that the S'orth Carolina Housing Finance
Agency intends to adopt regulations cited as 24
NCAC IK .060/ - .0605.
I he proposed effective date of this action is Au-
gust I. I9S8.
1 he public hearing will be conducted at 9:00
a.m. on May 4, 1988 at North Carolina Housing
Finance Agency, Board Room, 3300 Drake Circle,
Suite 200, Raleigh, North Carolina 27607.
y^omment Procedures: Written comments con-
cerning these rules must be submitted by May 4,
1988 to the APA Coordinator, North Carolina
Housing Finance Agency, Post Office Box 28066,
Raleigh, N.C. 2761 1. Oral comments may be
presented at the hearing.
CHAPTER 1 - N.C. HOUSING FINANCE
AGENCY
SUBCHAPTER IK - MULTIFA.MILY
UNSUBSIDIZED RENTAL PROGRAM
SECTION .0600 - CATALYST PROGRAM FOR
NOT-FOR-PROFIT ORGANIZATIONS
.0601 GENERAL INFORMATION
(a) The Rules of this Subchapter apply to the
administration of the Catalyst Program for not-
for-profit organizations initiated by the agency to
encourage the production of low-income rental
housing under the Low- Income Housing Credit
program and other programs for low-income
rental housing.
(b) Ehgible not for profit organizations are
those that meet the requirements described in
paragraph (3) or (4) of section 501(c) of the In-
ternal Revenue Code, are exempt from tax under
section 501(a) of the Intemal Revenue Code, and
have as one of the exempt purposes of the or-
ganization the fostering of low-income housing.
Statutory Authority G.S. I22A-5; I22A-5.I;
I22A-5.4.
.0602 OBJECTIVES
The purpose of the program is to promote the
development of low-income rental housing by
encouraging the use of the Low Income Housing
Credit program and other innovative programs
by not-for-profit organizations and, to avoid the
loss of federal low-income housing tax credits al-
located to the state.
Statutory Authority G.S.
122A-5.4.
122A-5; 122A-5.1;
.0603 TYPES OF ASSISTANCE
Program funds will be provided as grants or
deferred payment loans, amortizing or nonamor-
tizing, with extended loan terms. Loans will be
secured by the low-income housing project. In-
terest, if any, will accrue annually at a rate es-
tablished by the agency, depending on the needs
of each individual project. Program funds will
be used for one or more of the foUowing:
(1) Predevelopment costs;
(2) Construction cost overruns;
NORTH CAROLINA REGISTER
21
PROPOSED RULES
(3) Initial rent-up expenses;
(4) Rent subsidies;
(5) Finance expenses; and
(6) Other expenses that ensure project feasibil-
ity.
Statutory Authority
1 22.4-5.4.
G.S. I22A-5: 122A-5.I:
.0604 REQUIREMENTS
(a) Program eligibility will be restricted to not-
for-profit organizations which are the principal
sponsors of a low-income, rental housing project.
(b) Program funds will be restricted to projects
containing low-mcome housing units that are ei-
ther newly constructed or acquired and substan-
tially rehabilitated. Low-ijicome units are those
that are both income qualified, occupied by in-
di\iduals whose income is 50 or 60 percent of the
area median income, and affordable, with rents
and utihty allowance not exceeding 30 percent
of the eUgible low-income household's gross in-
come.
(c) Projects must respond to local market de-
mand and must show fmancial participation by
a unit of local eovemment.
Statutory Authority
122.4-54.
G.S. 122A-5: I22A-5.I;
.0605 PROCEDLRES
(a) Program funds will be advertised statewide
unless the agency determines that because of in-
adequate response, these targeting restrictions
shall be waived.
(1) Each county will be limited to one funded
project by September 30, 1988.
(2) Each metropolitan statistical area will be
limited to three funded projects by Sep-
tember 30, 1988.
(3) Projects will be funded on a first-come,
first-served basis untU 50 percent of initial
set-aside is committed; subsequently, pro-
jects win be pooled at regular inter\'als and
ranked according to project feasibility, lo-
cal need and the ability of the agency to
achieve an equitable geographic distrib-
ution.
(b) The program will require the completion
and submission of these documents:
(1) An application prescribed by the agency;
(2) A letter of intent from a unit of govern-
ment to provide supplementary fmancing;
and
(3) A letter of interest from investors or in-
termediaries concerning investment in the
tax credits.
These requirements will be described in greater
detail in the application materials developed by
the agency.
Statutory Authority G.S.
122 A- 5. 4.
122A-5; I22A-5.1:
lyotice is hereby given in accordance with G.S.
150B-12 that the North Carolina Housing Finance
Agency/North Carolina Hotting Partnership in-
tends to adopt the regulation cited as 24 NCAC
IM .0001.
1 he proposed effective date of this action is Au-
gust 1, 1988.
1 he public hearing will be conducted at 10:00
a.m. on May 4, 1988 at North Carolina Housing
Finance AgencylNorth Carolina Housing Part-
nership, 3300 Drake Circle, Suite 200, Raleigh,
North Carolina 27607.
(comment Procedures: Written comments con-
cerning this rule must be submitted by May 4,
1988 to the .4 P. 4 Coordinator, North Carolina
Housing Partnership, Post Office Box 26147, Ra-
leigh, N.C. 2761 1. Oral comments may be pre-
sented at the hearing.
SLBCH AFTER IM - NORTH CAROLINA
HOUSING TRUST FUND
.0001 ADOPTION OF CHAPTER 122E BY
REFERENCE
(a) The North Carolina Housing Trust and Oil
Overcharge Act, Chapter 122E of the General
Statutes, and future amendments to the act are
adopted by reference under G.S. 150B- 14(c).
TTie act establishes overall policy guidelines for
the administration of the Housing Trust Fund.
(b) Copies of Chapter 122E may be obtained
at the North Carolina Housing Finance Agency
office, 3300 Drake Circle, Suite 200, Raleigh,
North Carolina or by writing to the agency at
Post Office Box 28066, Raleigh, North Carolina
27611.
Statutory .4uthoritv G.S.
122E-8.
I22E-4; 122E-5:
->•}
NORTH CAROLINA REGISTER
NC AC INDEX
TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATIVE CODE
TITLE DEPARTMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14A
15
16
17
18
19A
20
♦21
22
23
24
25
26
Administration, Department of
Agriculture, Department of
Auditor, Department of State
Commerce, Department of
Corrections, Department of
Council of State
Cultural Resources, Department of
Elections, State Board of
Governor, Office of the
Human Resources, Department of
Insurance, Department of
Justice, Department of
Labor, Department of
Crime Control and Public Safety, Department of
Natural Resources and Community Development, Department of
Education, Department of
Revenue, Department of
Secretary of State, Department of
Transportation, Department of
Treasurer, Department of State
Occupational Licensing Boards
Administrative Procedures
Community Colleges, Department of
Housing Einance Agency
State Personnel, Office of
Administrative Hearings, Office of
NOTE: Title 21 contains the chapters of the various occupational licensing boards.
CHAPTER LICENSING BOARDS
2 Architecture, Board of
4 Auctioneers, Commission for
6 Barber Examiners, Board of
8 Certified Public Accountant Examiners, Board of
10 Chiropractic Examiners, Board of
12 Contractors, Licensing Board for
14 Cosmetic Art Examiners, Board of
16 Dental Examiners, Board of
18 Electrical Contractors, Board of Examiners of
20 Foresters, Board of Registration for
21 Geologists, Board of
22 Hearing /\id Dealers and Fitters Board
26 Landscape Architects, Licensing Board of
28 Landscape Contractors, Registration Board of
31 Martial & Family Therapy Certification Board
32 Medical Examiners, Board of
33 Midwifery Joint Committee
34 Mortuary Science, Board of
36 Nursing, Board of
37 Nursing Home Administrators, Board of
38 Occupational Therapists, Board of
40 Opticians, Board of
42 Optometry, Board of Examiners in
NORTH CAROLINA REGISTER
23
NC AC INDEX
44 Osteopathic Examination and Registration, Board of
46 Pharmacy, Board of
48 Physical Therapy, Examining Committee of
50 Plumbing and Heating Contractors, Board of
52 Podiatry Examiners, Board of
53 Practicing Counselors, Board of
54 Practicing Psychologists, Board of
56 Professional Engineen and Land Surveyors, Board of
58 Real Estate Commission
60 Refrigeration Examiners, Board of
62 Sanitarian Examiners, Board of
63 Social Work, Certification Board for
64 Speech and Language Pathologists and
Audiologists, Board of Examiners of
66 Veterinary^ Medical Board
24 NORTH CAROLINA REGISTER
CUMULA TIVE INDEX
CUMULA TIVE INDEX
(April 1988 - March 1989)
1988 - 1989
Pages Issue
1 - 25 April
AO - Administrative Order
AG - Attorney General's Opinions
C - Correction
E - Errata
EO - Executive Order
FDL - Final Decision Letters
FR - Final Rule
GS - General Statute
JO - Judicial Orders or Decision
LRA - List of Rules Affected
M - Miscellaneous
NP - Notice of Petitions
PR - Proposed Rule
SO - Statements of Organization
TR - Temporary Rule
EXECUTIVE ORDERS
Executive Orders 68-71, 1 EO
FINAL DECISION LETTERS
Voting Rights Act, 5 FDL
HUMAN RESOURCES
Health Services, 7 PR
Medical Assistance, 7 PR
INDEPENDENT AGENCIES
Housing Finance, 21 PR
NATURAL RESOURCES AND COMMUNITY DEVELOPMENT
Coastal Management, 1 1 PR
STATE TREASURER
Local Government Commission, 18 PR
NORTH CAROLINA REGISTER 25
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